Suppose the Inflation Rate Is 3 Percent and the Output

question 108

Multiple Choice

Suppose the inflation rate is 3 percent and the output gap is -1 percent.Assuming the equilibrium real interest rate is 2 percent,using the Taylor rule,what target should the Fed set for the federal funds rate?

• A) 5 percent
• B) 6 percent
• C) 4 percent
• D) 1 percent

---

Definitions:

Gantt Chart

A visual project management tool that displays tasks against time, highlighting project duration, task order, and progress.

Project Scheduling

The process of planning and organizing project tasks and activities into a timeline, with defined start and finish dates for each task.

Gantt

A type of bar chart that illustrates a project schedule, including start and finish dates of project elements and dependencies between tasks.

Network Charts

Graphical representations of a project's activities and their sequences, showing the interdependencies and the critical path of the project.